Kuwait signed an agreement with China on Sunday to set up a mechanism for the development of its new economic hub, Silk City, and the five northern islands.

The head of the Silk City project, Faisal Al Medlej, signed the agreement with China's National Development and Reform Commission, a government-run economic management agency, at its headquarters in Beijing, the Kuwait News Agency (Kuna) reported.

The project is the cornerstone of the New Kuwait 2030 vision, which aims to transform the country into a commercial and cultural hub for the region.

“There is mutual and substantial consensus between ‘New Kuwait 2030’ vision and the 'Belt and Road' initiative to revive the Silk Road and establish a commercial centre to serve the world,” the Kuwaiti Ambassador to China, Samih Hayat, told Kuna.

The agreement to team up with China to develop Silk City and the five islands — Failaka, Warba, Boubyan, Miskan and Awha — came during Emir Sabah Al Ahmed Al Sabah’s visit to Beijing in July.

Silk City and the islands will serve as huge economic free zone that will link the Arabian Gulf to central Asia and Europe. A 36-kilometre bridge connecting Kuwait’s mainland to the five islands is on track for completion by the end of the year.

One of the main developments will be the Mubarak Seaport with a capacity of 24 berths that will help to increase trade through the Red Sea to Europe. The port, when complete, will be Kuwait’s largest commercial trading hub.

The plan signed between Emir Sabah and Chinese President Xi Jinping included a “co-operation protocol” aimed at increasing strategic defence ties.

Huawei has also been involved in developing the technical aspects of the project with an emphasis on creating an intelligent infrastructure for network and security purposes.

The details of the Silk City project have yet to be announced but construction has begun on several aspects, including laying down the initial infrastructure.

The Kuwaiti delegation will spend the rest of the week in Beijing for meetings with the Chinese government's development arm.